The firm behind the ill-fated UST stablecoin said the filing is \u201ca strategic step\u201d that will enable it to continue its operations.<\/p>\n
Terraform Labs, the company behind the now-defunct cryptocurrencies LUNA and TerraUSD<\/a> (UST), has filed<\/a> for voluntary Chapter 11 bankruptcy in Delaware.<\/p>\n According to a Jan. 21 filing, the firm led by Do Kwon estimates its total assets between $100M and $500M. Liabilities are estimated to be in the same range.<\/p>\n The move is a \u201cstrategic step\u201d that will enable it to continue its operations and support for the Terra community and ecosystem, the company said in a press release shared with The Defiant. <\/em>The company plans to continue expanding its Web3<\/a> offerings, touting its recent acquisition of Pulsar Finance, a cross-chain portfolio manager.<\/p>\n Terraform Labs has been embroiled in several legal actions after its flagship stablecoin UST \u2013 which offered a 20% fixed yield \u2013 collapsed<\/a> and erased $40B of value, prompting a widespread market sell-off.<\/p>\n <\/p>\n The Terra implosion in May 2022 also precipitated the downfall of major crypto firms, including Three Arrows Capital<\/a>.<\/p>\n The U.S. Securities and Exchange Commission (SEC) charged<\/a> the company and its leader, Do Kwon, with running a multi-billion dollar fraud. In December 2023, a judge ruled against<\/a> Do Kwon and Terraform Labs for offering unregistered securities<\/p>\n